Non-competition clause

The statutory prohibition of competition expires at the end of the contract, which is why the employee is in principle allowed to compete with his former employer after the termination of the employment relationship. However, employment contracts regularly contain clauses by which the employee undertakes to refrain from competing with his former employer for a certain period after the end of the contract.

In order for such a post-contractual non-competition clause to be valid, certain conditions - in addition to written form - must be fulfilled. In particular, the employee must have insight into the clientele or into the employer's manufacturing or business secrets and he must be able to cause considerable damage to the employer by using the knowledge gained through this.

The non-competition clause must be limited in terms of place, time and subject matter in order to prevent undue impediment to the employee's economic progress. If the non-competition clause is excessive, it is not invalid, but must be limited by the judge in consideration of all circumstances.

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